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Lesson #1: Keep Your Operations Lean And Clean

Article Overview: In 2001, Musk had another one of his many dreams: he wanted to launch a “Mars Oasis” project, landing a miniature greenhouse on Mars. He wanted to see if he could grow food on the planet, which would help pave the way for his long term goal of populating outer space. But when Musk began looking into the project, he immediately ran into a major problem.

Lesson #1: Keep Your Operations Lean And Clean

In 2001, Musk had another one of his many dreams: he wanted to launch a “Mars Oasis” project, landing a miniature greenhouse on Mars. He wanted to see if he could grow food on the planet, which would help pave the way for his long term goal of populating outer space. But when Musk began looking into the project, he immediately ran into a major problem.

Musk discovered that the launch costs alone would be so high that they would dwarf even the project’s development. “We could figure out ways with small aerospace companies to do a low-cost spacecraft and lander,” he says. “But we could not find a way to do a low-cost launcher, unless we went to the Russians.” Although he is not against turning to others for help per se, Musk thought that the risks of dealing with the Russians would be too high. He did not want to go through all the complications.

With that, Musk decided to create a feasibility study group. Before he was going to move forward, Musk wanted to know if it was even possible to create a low-cost space launch vehicle in America, one that was not only cheap but still equally as reliable. Musk, along with a number of rocket experts studied the issue and came to one conclusion: “The answer was we thought it could be done,” says Musk, and he was the one that was going to do it.

“There is nothing inherently expensive about rockets,” says Musk. “It's just that those who have built and operated them in the past have done so with horrendously poor efficiency.”

And so, Musk created Falcon One. “Falcon One is going to be the lowest cost per flight to orbit of any production rocket,” says Musk. At jut $15 million per lift off, Musk has achieved his goal. “Which means we’re cheaper than the Chinese, cheaper than [the] Russians or anywhere else – and we’re doing it in the United States with American labour costs.”

How has Musk been able to achieve his goal? “I think the reason it’s cheaper is, first of all, we are a private entity and we have a very lean system in here,” he says. “What we have been able to do here at SpaceX is to cherry-pick, you know, the top one or two percent and give them, you know, capital to execute well and a clear mission, which is low cost, reliable access to space, and no other constraints.” To that end, Musk employs just 140 people and refuses to bog them down with bureaucracy.

When Musk first started in the space industry, rockets were designed with quality and performance in mind and little concern with cost. Launching satellites would cost almost three times as much as the actual satellite that was being launched. Today, Musk is happy about how far his company has come, but says that is not what should have people talking. Instead, they should be wondering why everyone is not doing things like him. And, whether it’s building rockets or launching online payment systems, Musk says the number one priority should be on keeping the business a lean, mean, money-making machine.

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Article Tags: aerospace companies, america one, american labour, falcon, feasibility study, labour costs, lander, launch vehicle, launcher, long term goal, miniature greenhouse, musk, oasis project, outer space, poor efficiency, private entity, russians, space launch, spacecraft, study group



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